Is the 'Bitcoin Pyramid' Cracking? Peter Schiff Predicts Forced BTC Liquidations by MicroStrategy

Cover image via youtu.be Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not liable for any financial losses incurred while trading cryptocurrencies. Conduct your own research by contacting financial experts before making any investment decisions. We believe that all content is accurate as of the date of publication, but certain offers mentioned may no longer be available. Economist Peter Schiff, in a recent post on X , revealed what he believes is the main vulnerability in Michael Saylor’s Bitcoin strategy, which he bluntly called a "Bitcoin pyramid." At the center of the discussion is the instrument STRC — Stretch Preferred Stock — which, according to Schiff, could become the reason for the first forced sale of Bitcoin in the history of Strategy (formerly MicroStrategy). Advertisement What is STRC? These are preferred shares that operate on a principle different from the ordinary MSTR stock. First, unlike the volatile Bitcoin price , the STRC share aims to always trade at exactly $100, which, according to Strategy and its economists, makes the instrument attractive to conservative funds that are prohibited from buying crypto directly. The Bitcoin pyramid is being propped up by $MSTR , which pays an 11.5% yield on $STRC to keep buying. As more STRC shares are sold, Strategy burns ever more cash. Once that cash is depleted, @Saylor will have to choose between suspending the dividend or selling Bitcoin to pay it. — Peter Schiff (@PeterSchiff) March 9, 2026 To keep the share price at the $100 level during market declines, Strategy must raise the yield, and in March this year, the rate reached 11.5% annually. In addition, STRC holders stand first in line to receive payments. The company is obligated to pay them monthly dividends in dollars before any profits can go to holders of ordinary shares. Advertisement Why does Schiff call this a "Bitcoin pyramid?" The essence, in his view, lies in recursive debt. Strategy issues STRC to obtain dollars, but those dollars are used to buy Bitcoin, while Bitcoin itself does not generate cash flow, as it has no dividends. Therefore, to pay 11.5% to STRC holders, Saylor must either attract new investors, which Schiff considers a classic sign of a pyramid structure, or spend cash reserves, meaning selling Bitcoin . HOT Stories Ripple Exec Celebrates $100 Billion Milestone Crypto Market Review: Is Bitcoin (BTC) Bull Mode Switched On? XRP Looks Hopeless at $1, Solana (SOL) Heads to $95 in Surprising Mini-Bull Run You Might Also Like Mon, 03/09/2026 - 12:37 Strategy's Saylor to Eventually Buy One Million Bitcoin in Total, Samson Mow Bets By Yuri Molchan At the moment, Strategy’s cash reserves are estimated at $2.25 billion. With the current 11.5% rate and the volume of preferred shares issued, the company spends hundreds of millions of dollars per year just to service this stability instrument. Advertisement Because of this, Schiff warns that once the cash runs out, Saylor will face a choice. Either declare a dividend default, which would wipe out the value of STRC and collapse confidence in MSTR, or begin liquidating Bitcoin. #Peter Schiff #Michael Saylor #MicroStrategy #Bitcoin #Bitcoin News